NHL standoff: who wants what and what happens next?

NHL commissioner Gary Bettman, right, has offered the NHLPA a deal as the two sides look to agree a new collective bargaining agreement. Photograph: Chris Young/AP

What's happening

A sadly familiar story is playing out for hockey fans. The NHL and the Players' Association have until 15 September before the current collective bargaining agreement runs out. If the two sides haven't reached a new agreement by then, the season may be shortened (hello, NBA) or lost entirely (hello, 2004).

At the moment it doesn't look good for the fans. Or anyone else, really. At the heart of everything is money, duh – where to set the salary cap and floor – but the NHL also wants to limit contract length and put in place a minimum of years played before free agency. The NHLPA doesn't like the sound of any of that. And we haven't even mentioned revenue sharing yet.

So, with less than a month to go before that CBA winds down, the two sides are far apart on the most contentious of issues. They are set to sit down again Wednesday.

The league

The league, headed by commissioner Gary Bettman (a fan favourite), put forth a deal to the NHLPA on 13 July. First of all, the owners want to cut into the players' share of league revenues, slashing it from the current 57% to 43%.

At the same time, under the league's proposal, the way the salary cap is currently calculated would change. Now, it's calculated by adding $8m to the league midpoint – the total revenue divided by the number of teams – but the league wants to add only $4m to the midpoint. As it stands, the NHL salary cap is at $70.2m and the floor is $16m below that, at $54.2 million. If the league were to get its way, the cap would be below the current floor, at just under $51m.

The owners also want to limit contract length to five years with equal amounts of money being paid each year, thereby effectively eliminating signing bonuses. They also want to only allow players to become free agents after 10 years – now, that can happen after seven.

At the end of July, the league also presented the union with a revenue-sharing proposal. The NHL is having to deal with the downside of its increased revenues. The league is making money, but somewhat unevenly, and while revenues go up overall, the salary cap and floor rise. That's all right for the rich teams, but not so great for the ones at the bottom of the pile.

Under the current scheme, the top 10 richest teams fork over money to the poorest 15, and the most any team can contribute is $10m, based on the regular-season revenues. But like any loan, there are a bunch of rules attached. Jeff Z Klein at the New York Times explains:

"Rather than assigning a straight percentage of revenues to a fixed number of financially underperforming teams, the plan includes benchmarks, conditions and restrictions that can lower the amount a team receives or exclude it from revenue sharing entirely."

These include a somewhat insane number of things, but among those that Klein points out is one that prevents some teams from getting money simply because they're in an area with over 2.5 million people, which means they're theoretically capable of bringing in more revenue through things like attendance or advertising. This is a problem for only a few teams, but the most oft-noted example is the New York Islanders, who get no revenue-sharing cash but could probably use it – though one images they would simply give it all to Rick DiPietro.

Anyway, the shared revenue thing is a big deal and there are some interesting numbers out there to give us an idea of what it looks like right now.

In 2008-09, the NHL's hockey-related revenue came to $2.6bn. Forty-three per cent ($1.2bn) of that went to the owners. According to an internal NHL memo obtained by the Globe and Mail, $146m was designated as shared revenue.

Klein notes that this makes the contribution around 12%. "Last season the owners' portion of revenues came to $1.42bn. If that was shared at the same 12% rate, that figure would increase to about $170m," he writes.

The NHL's proposal would apparently expand the shared revenue scheme, though reports have been hazy on exactly how much there might be and how exactly it would work.

The players

The NHLPA countered in mid-August with a scheme proposed by Donald Fehr, its executive director. Fehr used to be the head of the Major League Baseball Players Association, where he oversaw a lockout of the 1994-95 season and won the players what some consider to be the best collective agreement in North American pro sports. A decade earlier, he won the players $280m in damages when he sued the MLB owners for collusion.

Fehr didn't like the sound of the NHL's offer, claiming it would cost the players anywhere from about $465m to $800m over the next three years if the league's revenues were to keep growing at around 7%, as they have for almost a decade. So he came up with a counter-claim (the full text of which is not public, so we get stuff like this from that side).

The NHLPA offered to untie entirely players' salaries from league revenues over the next three years. Instead, a fixed rate would kick in: a bump of 2% in the first year, 4% for the second and 6% in the third. After that, it would go back to the way it is now, with the players taking their 57% of revenue. The plan would also not decrease the current salary cap by very much, leaving it awfully close to the current $70.2m. At the same time, a hard salary cap would remain in place.

Probably the best analysis of what this means is over at Sportsnet, where Michael Grange sums up the consequences of this plan like this:

"It's a move that gives the owners the ultimate in cost-certainty, which they love. They will pay the players $1.91bn in 2012-13; $1.98bn in 2013-14 and $2.10bn in 2014-15. Only if league revenues grow at more than 10% a year would it be any more. Those figures represent raises of 2%, 4% and 6% from the $1.87bn the players got as their 57% share of the $3.3bn of [hockey related revenue] in 2011-12."

All of that sounds great for the owners. The catch? The NHLPA wants the league to pony up more money for teams that are struggling financially, with an increased revenue sharing plan. Under the union's proposal, the NHL's wealthiest teams would contribute as much as $250m to the bottom-end clubs. That would be a big pill to swallow for teams like the Toronto Maple Leafs, and combined with a salary cap that is still very close to the current one and no change to contracts or free-agency limits, there is a lot of road to go down before 15 September if we're going to see some hockey this fall.

The fans

The New York Rangers celebrate after beating the Philadelphia Flyers in the 2012 NHL Winter Classic, a fixture that is now under threat Photograph: Tim Shaffer/Reuters

It's not looking good. It's no help to say that we're used to this infighting, because all we want is to see some hockey – especially when the summer was not a totally boring one in terms of signings. The Minnesota Wild are poised to be a major contender in the West, finally, thanks to Zach Parise and Ryan Suter jumping aboard (this is, of course, assuming they get some goaltending). And in New York, Rick Nash will finally get the right stage on which to show off whatever talent he's been hiding from us all down in Columbus all this time, right? Right?

Still, it would be better than losing the entire season. Beyond the usual suffering, a lockout would also mean we'd lose the Winter Classic. OK, so its value is sometimes questioned, but the ability to see the Wings face the Leafs in the middle of a (presumably) sub-zero Michigan winter afternoon, in front of 100,000 people? Come on. What more do you really want?

Are we closer this time to a deal than we were before the locked-out 2004-05 season? Tough to say. Last time, we were promised cheaper tickets. That didn't happen. Judging by the good old HF Boards these days, fans are stuck between siding with the players, the owners or neither. Understandable. It's difficult not to be pretty cynical about the whole thing.

Where do we go from here?

You got me. Time will tell – what's left of it. Though there's a wide gulf between the two sides, everyone seems to agree that they all want to see hockey start up again as soon as possible. If that's true, it's conceivable that the owners could bend on the proposed hit to the players' share of revenue or even the league revenue sharing, which they seem to have acknowledged as something they could expand.

On the other hand, the players may start to concede ground on things like free-agency eligibility. It may just take one or two smaller details to be settled to get it all going.

Or, those same issues, like contract length and the elimination of salary arbitration (also in the NHL deal) could just as easily become the real sticking points that grind this thing into the dirt for months on end.

But hey, there's always basketball, I guess. Let me know what you think in the comment section below.